Mumbai: India’s leading stock exchange BSE on Thursday announced the successful creation, transaction and settlement of electronic gold receipts (EGRs), PTI reported. This launch will enable investors to trade in gold similar to shares.

The first transaction was done on 24 October during the Muhurat Trading session and it was successfully settled on T+1 day. BSE also stated that over 100 members have been successfully onboarded on the newly launched EGR segment.

In September, the Securities and Exchange Board of India (SEBI) had authorised the BSE to introduce the EGR segment on its platform.

What is an EGR?

Electronic Gold Receipts (EGRs) are types of shares which are issued in exchange for physical gold. Similar to other securities in the market, EGRs can be traded, cleared and settled.

Who can invest in EGR?

The EGR segment is open to all. Buyers and Sellers on the BSE which include individual investors, as well as commercial participants along the value chain like importers, banks, refiners, bullion traders, jewellery manufacturers, and retailers will now be able to invest in EGR.

Who will manage EGR?

According to SEBI gold exchange framework, only accredited vault managers would handle the e-receipts. The responsibilities of vault managers include not only the creation of EGRs but also withdrawals, deposits and redressal of grievances among others.

How can buyers convert physical gold into EGR?

By depositing the gold at the authorised delivery centre, the buyers can convert the physical gold into an EGR. Later, a depository receipt is generated for trading on BSE. Upon receipt of physical gold, a vault manager will record the relevant information in the common interface and create the EGR which will then appear in the demat account of the beneficial owner.

How can someone purchase an EGR?

You need to have a demat account if you wish to purchase an EGR. The purchasing and selling of EGR is akin to stock trading. The Gold exchange will offer the services like converting gold into EGRs, trading in EGRs and reconverting EGRs back to gold.

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(With PTI inputs)